Starbucks Falls Despite EPS Beat; Margins Slip

By Avi Salzman

Stabrucks posted 50 cents of EPS, a penny better than expectations. Revenue of $3.44 billion beat analysts’ expectations for $3.29 billion. Operating margin slid to 16.2% from 17%. Same-store-sales rose 9% worldwide and in the U.S.

“The margin contraction was due to higher commodity costs,” the company said. “The increase in commodity costs, primarily coffee, negatively impacted Q1 FY12 operating income and operating margin by approximately $105 million and 300 basis points, respectively, compared to the same period in the prior year.”

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.